PrizePicks and Underdog Fantasy Could be Forced Out of Wyoming Sports Betting Market

Do PrizePicks and Underdog Fantasy have a place in the Wyoming sports betting market? We're about to find out.

Both companies were recently sent cease and desist letters from the state. The orders alleged that their applications qualified as flat-out sports betting rather than Daily Fantasy Sports.

Now, online sports betting in Wyoming is legal. But PrizePicks and Underdog aren’t operating as licensed sportsbooks. They are registered as Daily Fantasy Sports apps, which allows them to do business in markets without a special license, often regardless of the state’s sports gambling laws.

Of course, Daily Fantasy Sports aren’t allowed in every region. Certain states have nixed them. New York, for example, forced Daily Fantasy Sports operators out of their market until they actually went ahead and legalized sports betting last year. Still, many other places allow Daily Fantasy operators to exist as an exception to their gaming laws. Until now, Wyoming was among the states that looked the other way. But that’s apparently changed.

Here’s Why Officials Believe PrizePicks and Underdog Fantasy are Operating as Unlicensed Wyoming Sports Betting Providers

The details of Wyoming’s stance against PrizePicks and Underdog Fantasy can be a little convoluted. The delay in finding a resolution has only made the issue harder to tackle. Currently, the state is still awaiting official responses from both companies. 

Fortunately, Sam McQuillan of Legal Sports Report unpacked all the pertinent details behind the Wyoming Gaming Commission’s thought process and what’s happened so far: 

Prizepicks and Underdog Fantasy both say they are working with Wyoming sports betting regulators after their deadline to respond to a cease-and-desist order arrived Friday. Each company was sent nearly identical letters in July, calling their player vs. house pick ’em games unlicensed Wyoming sports betting and not daily fantasy sports, as some states consider it. 

Both companies still operate in Wyoming, according to their websites. ‘We have been in active discussions with the Wyoming Gaming Commission, and those discussions will continue, including an in-person meeting scheduled for later this month. We look forward to continuing the dialogue with the Commission,’ Stacie Stern, Underdog vice president of government affairs, said in an email. PrizePicks delivered a similar response about its efforts. ‘Our lawyers have been in contact with the appropriate authorities. Those conversations remain positive and productive,’ said Elisa Richardson, vice president of strategic communications at PrizePicks. ‘We’re working collaboratively with the Wyoming Gaming Commission directly on the matter.’”

The responses from both PrizePicks and Underdog Fantasy make it seem as if an amicable resolution will be reached. Wyoming’s decision to allow each to continue their in-state operations suggests the same.

But what does that resolution look like? Will Wyoming eventually just grant more official exceptions to PrizePicks and Underdog Fantasy? Or will they be forced to reclassify as an official gambling operator, like every one of the best online sportsbooks in the United States? Does this ultimately all end with PrizePicks and Underdog Fantasy being forced to bow out of the Wyoming market?

Other States will be Watching the Outcome of This Wyoming Sports Betting Case

Regardless of how this issue plays out, it’s safe to say a handful of other states will be watching, waiting and ready to study the outcome once it’s determined.

Over the past couple of years, there has been a lull in the Daily Fantasy Sports spotlight. States have been more concerned with debating and, oftentimes, legalizing sports betting rather than harping on Daily Fantasy activity. However, now that 33 states offer some form of sports gambling, some of the focus has shifted back on to Daily Fantasy operators. In some ways, the uptick in legal sports gambling has been a bad omen for Daily Fantasy companies. States are more determined than ever to regulate and, thus, adequately tax any activities remotely related to betting. That’s why we’re seeing so many places with legal sports betting take aim at how Daily Fantasy companies operate.

As it turns out, Wyoming is merely one state in a long line of many. Now that sports betting in New York is over a year old, regulators are once again proposing rules that would ban Daily Fantasy entities from offering prop-style transactions. Sports betting regulators in Michigan are currently attempting to do the same. Last year, meanwhile, Maryland and West Virginia also sent their own cease and desist orders to PrizePicks and Underdog Fantasy. As a result, both companies ended up shuddering their operations in each state. 

Executives from Daily Fantasy companies have taken exception to the recent upswing in scrutiny. Some officials even claim that bigwigs like DraftKings and FanDuel sportsbooks, which got their start as Daily Fantasy operators, are responsible for coaxing states into anti-DFS views. 

This is why the eventual outcome in Wyoming is so important. It will be used as precedent in other cases. And at the moment, the resolution is anyone’s guess. For as many states that have sought to limit or ban Daily Fantasy Sports, others have granted official exemptions. This list of states that have approved Daily Fantasy operations includes Arizona, Indiana, North Carolina and even Colorado. In the interim, Wyoming is also a part of that group. Whether it stays that way, though, remains to be seen. 

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